Dive Brief:
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Discount retailer Dollar Tree Tuesday reported Q4 revenue was $5.37 billion, compared to Zacks Investment Research's estimates of $5.42 billion.
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The results were affected by the company’s acquisition last year of rival Family Dollar. Same-store sales on a constant currency basis rose 5.6% year over year at Dollar Tree and, adjusted for Canadian currency fluctuations, Dollar Tree same-store sales rose 1.3%. The positive same-store sales were driven by increases in customer count and average ticket, according to the retailer.
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Gross profit increased 80% to $1.65 billion, compared to $918.1 million year over year. The dollar increase was primarily driven by gross profit at Family Dollar as well as higher sales at Dollar Tree, according to the report.
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The retailer said that earnings for the full year would land between $3.35 to $3.65 per share, on revenue between $20.76 billion to $21.11 billion.
Dive Insight:
Things are still shaking out after Dollar Tree’s acquisition last year of rival Family Dollar. In Q4, Dollar Tree opened 128 stores, expanded or relocated 53 stores, closed 28 stores, and divested 325 Family Dollar stores.
Dollar Tree re-opened 58 former Family Dollar stores as new Dollar Tree stores in Q4, and re-opened 52 Deals stores to Dollar Tree stores in January.
Dollar Tree CEO Bob Sasser said he was proud of the results and said that Family Dollar had delivered positive same-store sales to the company each month of the quarter. The dollar store space is one of the more successful retail stories these days, and promises to stay that way as even an improving economy fails to dent many consumers’ need for low prices.
In fact, that problem continues to vex retailers like Kohl’s and Wal-Mart, which are working to find ways to improve traffic and sales. Wal-Mart in particular faces stiff competition from dollar stores, although it closed down its Wal-Mart Express experiment recently, which was meant to compete in the space.